In price policy discussions, the term administered prices generally refers to which of the following?

Introduction / Context:
In many economies, particularly developing ones, governments intervene in markets to stabilise prices of essential goods and services. When the state sets or controls prices instead of leaving them entirely to market forces, these are often called administered prices. Understanding this term is important for questions on price policy, inflation control, and public distribution systems.

Given Data / Assumptions:

• In a pure market system, prices are determined by demand and supply without direct government control.
• Governments sometimes fix prices for essential items like fertilizers, electricity, and food grains.
• Administered prices may be set by legislation, regulatory orders, or decisions of public bodies.
• The goal is often to protect consumers, support producers, or stabilise the economy.
• Administered prices are distinct from prices set by private monopolies or from negotiated wages in labour markets.

Concept / Approach:
Administered prices are those that are fixed or significantly influenced by government agencies or public authorities rather than being determined purely by free interaction of demand and supply. Examples include minimum support prices for agricultural products, regulated electricity tariffs, and some petroleum product prices in certain periods. In these cases, the authority considers social and political objectives as well as cost and profit when deciding the price. Therefore, the correct understanding is that administered prices involve government or public authority control.

Step-by-Step Solution:
Step 1: Recall that in a free market, prices adjust based on demand and supply, and no single authority fixes them.Step 2: Recognise that administered prices arise when a government or public body deliberately sets or constrains prices for specific goods or services.Step 3: Consider examples like minimum support prices for farmers, controlled gas cylinder prices, or regulated electricity tariffs.Step 4: Understand that these prices are designed to achieve policy goals such as protecting consumers, ensuring producer income, or controlling inflation.Step 5: Compare the options and identify the one that explicitly mentions prices fixed or influenced by the government rather than market forces.Step 6: Select option a as the accurate description of administered prices.

Verification / Alternative check:
Public finance and Indian economy textbooks refer to administered prices in the context of price controls, subsidies, and public distribution. They explain that such prices are set by authorities to pursue socio economic objectives rather than leaving the level of prices entirely to the market. Discussions of economic reforms often speak of deadministering prices when controls are reduced. These references support the interpretation in option a.

Why Other Options Are Wrong:
Option b describes prices that are purely market determined, which is the opposite of administered prices. Option c refers to wages negotiated between unions and management, which are labour market outcomes, not general administered prices. Option d highlights prices fixed by foreign governments, which may affect import costs but are not what is usually meant by administered prices in domestic policy discussions. Option e refers to private monopoly pricing without government oversight, which is again different from prices administered by public authorities.

Common Pitfalls:
Students sometimes confuse administered prices with monopoly prices or with any price influenced by large firms. Another misunderstanding is to assume that any government tax or subsidy automatically implies administered pricing, even when markets still adjust. To avoid confusion, it is helpful to remember that administered prices involve direct or strong government control over the price level of specific goods or services.

Final Answer:
Administered prices refer to prices of certain goods and services that are fixed or heavily influenced by the government or a public authority rather than by free market forces.